# RA contribution limits

## How RA contribution limits work

Your Retirement Annuity contributions are tax-deductible, but there are limits to how much you can claim. Understanding these limits helps you maximise your tax benefits without over-contributing.

- **Percentage limit**: Deduct up to 27.5% of your taxable income
- **Annual cap**: Maximum deductible amount is R350,000 per year
- **Whichever is lower**: Your deduction is the lesser of the percentage or cap

For most people, the 27.5% calculation determines your limit. The R350,000 cap only applies if your taxable income exceeds approximately R1.27 million per year.

## Calculating your contribution limit

Your contribution limit is based on your taxable income, which includes your salary, bonuses, rental income, and other taxable earnings before deductions.

**Example calculations**:

| Taxable income | 27.5% calculation | Annual limit |
| --- | --- | --- |
| R300,000 | R82,500 | R82,500 |
| R500,000 | R137,500 | R137,500 |
| R800,000 | R220,000 | R220,000 |
| R1,500,000 | R412,500 | R350,000 |

In the last example, the 27.5% calculation exceeds R350,000, so the annual cap applies instead.

**What counts as taxable income**:

- Gross salary before deductions
- Bonuses and commissions
- Rental income
- Investment income (interest, dividends)
- Business income

> **Note**: If you have a pension fund through your employer, those contributions also count towards your 27.5% limit. Factor this in when calculating how much additional RA contribution you can make.

## Tax deduction benefits

Contributing to your RA reduces your taxable income, which means you pay less income tax. The actual tax saving depends on your marginal tax rate.

**How tax savings work**:

1. You contribute R10,000 to your RA
2. Your taxable income decreases by R10,000
3. You save tax at your marginal rate (18% to 45%)

**Example tax savings by income bracket**:

| Taxable income bracket | Marginal tax rate | Tax saved on R10,000 contribution |
| --- | --- | --- |
| R237,101 - R370,500 | 26% | R2,600 |
| R370,501 - R512,800 | 31% | R3,100 |
| R512,801 - R673,000 | 36% | R3,600 |
| R673,001 - R857,900 | 39% | R3,900 |
| R857,901 - R1,817,000 | 41% | R4,100 |
| Above R1,817,000 | 45% | R4,500 |

The higher your income, the more valuable your RA tax deduction becomes. Someone in the 45% tax bracket effectively gets nearly half their contribution back as tax savings.

## What happens if you exceed the limit

You can contribute more than the deductible limit, but the excess amount will not reduce your taxable income for that year.

**How excess contributions are handled**:

- Amounts above the limit are carried forward to future tax years
- SARS tracks excess contributions automatically
- You can claim the excess in future years when you have available limit

**Example**: You earn R400,000 and contribute R150,000 to your RA. Your limit is R110,000 (27.5% of R400,000). The R40,000 excess carries forward and can be claimed next year.

There is no penalty for exceeding your limit, but you lose the immediate tax benefit on the excess amount. Plan your contributions to stay within your annual limit for maximum efficiency.

## Providing your tax information

When you open your Retirement Annuity on Fynbos, you provide your tax number and gross monthly salary. This information ensures your contributions receive the full tax benefits.

1. Navigate to **Accounts** from your home screen
2. Tap **Add account**
3. Select **Retirement Annuity**
4. Enter your **Tax number** (your SARS tax reference number)
5. Enter your **Gross monthly salary** (before any deductions)
6. Tap **Continue**

Your gross monthly salary helps estimate your annual contribution limit. You can update this information if your income changes.

## Tracking your contributions

Fynbos tracks your RA contributions throughout the tax year. View your contribution history on your Retirement Annuity account screen.

At tax time, download your tax certificate from **Account Settings** to include your RA contributions in your tax return. The certificate shows the total contributions for the tax year.